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The head of research at the on-chain analytics firm CryptoQuant has discussed how demand serves as the foundation for Bitcoin cycles, rather than price movement.
Recent Decline in Bitcoin’s Apparent Demand
In a recent post on X, Julio Moreno, CryptoQuant’s head of research, offered a fresh perspective on Bitcoin cycles. He stated, “Most people focus on price performance to define a cycle, but they should really be examining demand.”
The analyst assessed the “demand” for Bitcoin utilizing the Apparent Demand indicator, which measures daily miner issuance against variations in the one-year dormant supply.
The miner issuance represents the quantity that miners are “producing” on the network daily through block rewards. This metric essentially signifies the “output” of the asset. Conversely, the one-year inactive supply can be viewed as the cryptocurrency’s “inventory.”
Therefore, the Apparent Demand effectively contrasts Bitcoin’s production against the alterations in its inventory. Below is the chart provided by Moreno, displaying trends in the 30-day and one-year versions of the Apparent Demand over the last decade.
The graph highlights that the last several Bitcoin cycles have shifted into a bear market whenever the Apparent Demand has dropped into negative territory on both the monthly and yearly scales.
In the current cycle, the 30-day Apparent Demand has recently dipped into the negative zone, indicating that monthly demand for the asset has turned unfavorable.
On an annual basis, the metric remains positive, but its trend has been downward. If this decrease continues, it won’t be long before the indicator falls into the negative range.
Looking at the patterns from previous cycles, the current trend in Apparent Demand appears bearish. It’s yet to be determined whether the yearly metric will cross into negative territory or rebound, signaling a potential resurgence of demand.
Spot demand is not the sole metric for assessing Bitcoin demand these days. With the rise of exchange-traded funds (ETFs), fresh off-chain demand has entered the cryptocurrency this cycle.
As noted by on-chain analytics firm Glassnode in an X post, the 30-day net flow related to US BTC spot ETFs has recently remained negative, indicating that demand has been relatively weak in this market segment as well.
BTC Price
Bitcoin has recently stabilized, with its price hovering around the $88,000 mark.
